The United States intends to impose high tariffs on Chinese imported game consoles
Not only the high-profile Huawei, in the turmoil of Sino-US trade friction, the game industry, which is at the forefront of the hardware and software industry, is not immune.
According to foreign media Game Daily, the Trump administration intends to impose tariffs of up to 25% on various products imported from China, including game consoles and related accessories, and some PC accessories are also included.
According to the report, the list published by the US Trade Representative Office covers thousands of categories of items and accessories, including game consoles, game controllers and coin-operated arcade games, as well as a variety of game categories, including related components. To face an import tax rate of up to 25%.
For this tariff adjustment, the American Entertainment Software Association believes that the electronic entertainment industry actually brings a trade surplus to the US economy, and increasing tariffs on this part of imported goods will cause damage to the US economy, industry and consumers.
According to reports, video games are usually sold at a loss – even Nintendo is barely recovering costs or keeping a small profit. However, a 25% tariff will disrupt consumer expectations of commodities, as manufacturers tend to recover the cost of taxes paid by raising the price of the goods.
In addition, the US table games are also in the midst of growth. With the interest of people, the market size has increased by about 11 billion US dollars worldwide, and it is expected to increase by 9% by 2019. Some insiders believe that this tariff adjustment will hinder the natural growth of this market.
It is reported that the tariff hearing will begin on June 17. Before that, the world’s largest electronic entertainment exhibition E3 will be held in Los Angeles from June 11th to June 13th; on the other hand, the time when the new tariff will take effect May be June 24, and less than two months later, GenCon, the largest desktop game conference in North America, will be held. Reporters from Game Daily are worried that tariff adjustments may also be applied to these two industries. The event has an impact.
Nintendo, Japan: May have a major impact on the company’s business
The pessimistic attitude towards this move is not limited to the United States. Host game giants Japan and major game console manufacturers are also worried about the consequences of the move to the US market. On May 25th, the CCTV-4 channel “Asia Today” program quoted the Nihon Keizai Shimbun as saying that the US government’s tariff on China’s imported game consoles may directly lead to an increase in the sales price of game consoles in the United States.
The report is based on Nintendo, a Japanese game console manufacturer. The company’s current top-selling product, Switch, has sold 8 million units worldwide in 2018, with sales from the Americas accounting for about 40%. What makes Nintendo’s headache is that The Swtich products sold by the US are all made in China. Since most of the production operations of Nintendo Switch in China are entrusted to the production of precision electronics factories, this part of the business cannot be adjusted in a short time.
According to the report, Switch sells for about US$300 in the US, and once a 25% high tariff is imposed, the sales price of Switch will increase by an additional tens of US dollars. American consumers will bear a lot of burden. At the same time, Swtich sales and Nintendo’s performance will inevitably be affected.
In response, Nintendo President Furukawa Taro said: “This will have a major impact on the company’s business and is closely watching the future.”
For Chinese game console makers, this may be “three loses”
Of course, from the standpoint of the Chinese game industry, the aftermath of the Sino-US trade friction on the game industry may be a “three loses” in the three countries of China, Japan and the United States. Among them, the game machine production industry has been quite large. Guangdong will also be affected by a considerable degree.
“2018 Guangdong Game Industry Annual Development Report” shows that in 2018, Guangdong’s game export revenue reached 27 billion yuan, a year-on-year increase of 23.8%, compared with 2015 growth of 170%, accounting for 41.6% of China’s game overseas total revenue. Among them, online game export revenue was about 19.93 billion, accounting for 73.9% of total exports; game amusement equipment export revenue was about 6.7 billion yuan, accounting for 24.8% of total exports; home game machine export revenue was about 350 million yuan, accounting for total exports. 1.3%.